On the Spot with Jonathan Rivera – October 2025
October 6, 2025
On the Spot with Jonathan Rivera: Rising Housing Costs and the Supply Shortage
The latest episode of On the Spot, featuring Jonathan Rivera and Steve Williams, takes a deep dive into one of today’s most pressing issues: the rising cost of housing in the United States. Their discussion sheds light on how high interest rates, limited construction, and municipal policy decisions are shaping the housing market for both renters and buyers.
Housing Costs Continue to Climb Despite Interest Rate Expectations
Jonathan and Steve began by addressing the ongoing rise in housing costs. Even with hopes that interest rates might decline more dramatically, affordability remains a significant concern. Jonathan noted that construction activity is down 30% from pre-pandemic levels, meaning fewer new homes are being built to meet demand.
For buyers, the financial gap between renting and owning is also widening. In some markets, the cost of a mortgage payment is up to 2.5 times higher than monthly rent, creating further barriers for families trying to purchase a home.
A Severe National Housing Shortage
The conversation turned to supply, with Jonathan highlighting that the U.S. remains severely undersupplied in housing. While Sunbelt and Mountain regions have seen growth in new apartment and home construction, the pace has not been enough to address nationwide demand.
Jonathan emphasized that this imbalance is driving up costs and limiting options for many Americans. Without significant new supply, affordability challenges are likely to persist.
The Role of Municipalities in Affordable Housing
Municipalities across the country are exploring ways to address the affordability crisis. Jonathan explained that some cities are offering tax incentives to encourage development, while others are considering or implementing rent control policies.
Rent control, however, presents a challenge. While it can provide short-term relief for tenants, Jonathan cautioned that it poses medium-term risks for property owners and can discourage future development. Developers may be less inclined to build if rent growth is capped, which could worsen supply shortages over time.
Why More Construction Is the Key Solution
Despite policy experiments, Jonathan stressed that the most effective long-term solution is to build more housing. Yet, the current environment makes that difficult. Rising construction costs, increasing labor expenses, and elevated interest rates all reduce the feasibility of new projects.
As Jonathan explained, “We’re not going to have a lot of supply at this time. With construction costs, rising cost of labor, as well as interest rates, it’s really hard to build right now. Until rents are at a high enough point to make it cost feasible.”
Takeaways for Investors, Developers, and Policymakers
The episode underscored several critical takeaways:
• High housing costs are here to stay until supply improves.
• Construction activity is constrained.
• Policy solutions like tax incentives may help, but rent control could backfire by discouraging new development.
• Building more housing remains the only sustainable path forward to address affordability challenges.
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